Why Bitcoin decreases in spite of Trump's executive order by setting a Bitcoin strategic reserve

Bitcoin fell on Friday in spite of US President Donald ATU Signing an executive order to establish a Bitcoin strategic reserve. The movement, which initially was expected to stimulate the feeling of the market, instead disappointed investors, because it became clear that the government will not buy fresh bitcoin, but will only rely on the seized assets.

No new bitcoin purchases

The Bitcoin strategic reserve will be financed only by BTC confiscated in cases of confiscation of civil and civilian assets, rather than by government shopping. “The reserve will be used with Bitcoin held by the federal government that has been lost as part of the procedures for confiscating criminal or civil assets,” said the Executive Order of the White House.

Investors anticipated that the US government could buy Bitcoin directly, which can stimulate demand and price. Instead, the Executive Order explained that no money for taxpayers for crypto purchases will be used, depreciating the feeling of bullish.

Crypto Tracker

“BTC has reacted to Trump’s executive order to create a Bitcoin strategic reserve funded exclusively from the assets confiscated by the government, raising the concern that the government will not be a buyer,” said Patel, CEO and co-founder of Mudrex.

Bitcoin falls below $ 88

Starting at 10:39, Bitcoin fell by 4.7% to $ 87,622 after reaching a low level of $ 84,717. Ethereum dropped by 6% to $ 2,156, while Crypto Global’s market ceiling decreased by 4.1% to $ 2.88 trillion. Altcoins also suffered with Solana, decreasing by 5%, XRP decreased by 1.5%, cardan decreased by 10%, and Dogecoin losing 7%. “The market reaction to this news was a little negative, because people expected the US to implement fresh capital in Bitcoin. But for now, even if the White House calls it digital gold, they will not buy fresh BTC,” said Coinswitch Market.

Future Bitcoin acquisitions possible but with constraints

While the executive order does not authorize immediate Bitcoin purchases, it leaves the door open for future purchases. Treasury and trade departments have been pregnant to develop strategies for purchasing several BTC-what these strategies are neutral budgetary and do not impose taxpayers’ costs. However, any additional acquisitions beyond the confiscated assets would require additional executive or legislative actions.

Holding -government Bitcoin will not be sold

A key provision in order states that the BTC has submitted in the Bitcoin strategic reserve “will not be sold” and will be maintained as the reserve assets of the United States. This means that the US government effectively removes some of the supply of Bitcoin from the circulation, which can have an impact on the dynamics of long -term supply.

Despite this fact, traders seemed more focused on the lack of a new request, rather than the reduced offer, contributing to sale.

US digital assets stocks for other crypts

The order also establishes a stock of digital assets separately from the United States to have other confiscated cryptocurrencies. Unlike Bitcoin, these non-BTC assets can be managed differently, with the treasury needed to determine the strategies for their responsible administration.

Legal revision and investment can model future policy

Within 60 days, the Treasury department must present a report that evaluates the legal and investment implications of the Bitcoin strategic reserve and digital assets. This review could lead to additional policy changes, which could model how the US government deals with Bitcoin and other digital assets.

Read also: Peter Schiff calls Trump’s crypto reserve pushes a “pump and garbage”, asks the Congress probe

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